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Tax Credits & Allowances

Tax credits and allowances are payouts made regularly by the state into bank accounts to support those with children or in work but with a low income. They’re paid via the tax office and anyone aged over 16 who normally lives in the UK can apply to get them.

  • To qualify for Tax credit and allowance you must be over 16 years of age and must live in UK.
  • An individual cannot get to be entitled for tax credit and allowance if they are subject to immigration control
  • Tax credits and allowances are normally paid in arrears, directly into a bank, building society or post office card account
  • There are two types of tax credits and allowances

Child Tax credit

  • Child tax credit (CTC) is paid by HMRC to support families with children.
  • Child tax credit can be awarded if you have
    • One child and household income of up to about £26,200.
    • 2 children and household income of up to about £32,900
    • And you may be paid higher depends on your income.
    • It is paid in addition to child benefit and you can claim whether you are working or not.
    • Many parents in UK get child tax credit for raising their child.
    • You can be entitled to Child Tax Credit for a young person aged 16, 17, 18 or 19 who is in full-time non-advanced education.
    • If the eligible child has left his full time non-advanced education or approved training you may able to get child tax credit for them for up to 20 weeks until they left.

 

  • You can’t get Child Tax Credit for a child or qualifying young person if they’re:
    • Aged 16 or over and are getting Income Support, income-based Jobseeker’s Allowance, Employment and Support Allowance, tax credits or Universal Credit in their own right.
    • Aged 16 or over, have left full-time non-advanced education or approved training, registered with a qualifying body, but then started paid work for 24 hours or more a week during the 20 week extension period.
    • Serving a custodial sentence of more than 4 months imposed by a court
    • The child tax credit is made up of several elements; family element, child element and disabled child element.

Working tax credit

  • Working Tax Credit is for working people on a low income. You can be employed or self-employed, and you don’t have to have children to claim.
  • In all cases you have to be either:
    • Working (whether in employment or self-employment) when you make your claim.
    • Starting paid work within 7 days of making your claim.
    • You may get more if you have a disability or are responsible for children and have childcare costs.
    • Working Tax Credit is paid directly to the person who is working.
    • The childcare element of Working Tax Credit is paid directly to the main care taker of the child or children along with Child Tax Credit.
    • Working tax credit is made up of several elements; disable working persons, people with severe disability and the costs of registered or approved childcare.
    • If you’re not responsible for a child or qualifying young person you can claim Working Tax Credit if you or your partner, if you have one, are aged:
      • 25 or over and work at least 30 hours a week.
      • 16 or over, work at least 16 hours a week and qualify for the disability element of Working Tax Credit.
      • Over 60 and work at least 16 hours a week.
      • Couples are eligible for the 30-hour element if you jointly work at least 30 hours a week.
      • Couples without children can’t add their hours together to qualify for the 30-hour element